The face of foreclosure
Foreclosure…short sales…these are common words these days. Buyers specifically ask about these homes as they are perceived to be a good deal.
The rate of foreclosure has gone up in Salem Oregon and will continue to rise in 2009. Right now 3.8% of the listings on the WVMLS are designated as short sales. There are more likely more, but agents are supposed to check the box that designates the home a short sale, some do not.
Foreclosed house
Now it used to be that when we talked about a foreclosed home, neighbors jumped up and down for joy. “Thank goodness,” they exclaimed. “Someone is going to clean that house up!” Foreclosures tended to be eyesores in neighborhoods.
This foreclosed home that sold in December for $53,900 is what most people tended to think of when they saw foreclosures.
The face of foreclosure has changed. No longer are foreclosures just those boarded up homes, neglected lawns and exteriors, and junked out interiors.
Foreclosed home
The new face of foreclosure involves well cared and well loved homes. Homes that a buyer wished for, but overspent for. This home was also sold in December of 2008 as a foreclosed property. It sold for $142,500 which was 89% of the ORIGINAL list price, and 95% of list price at the time the offer was made.
There are currently 54 homes on the WVMLS for Salem that are designated as short sales and 16 REO (ie bank owned homes) for Salem.
Some of these are good deals and some are not. Just because a home is a short sale does not mean that it is a good buy. Short sales are fraught with complex transaction issues and buyer need to hire an agent that is competent to handle them.
As you are out house shopping and looking for good deals, the temptation to just look at short sales and foreclosures is powerful. No doubt that the face of foreclosure has changed, but don’t forget that there are other motivated sellers as well. With lots of inventory, spend time finding the right house at the right price for you.
If you want to get notices of new short sale homes or foreclosures just email me (melina@tomsonburnham.com) and ask to be put on the list.
January 19th, 2009 at 2:04 am
We bought a property on a short sale and it has worked out well, although it was only because we were in no rush to buy that we were able to weather the very long process of arranging the approvals from the two banks that were involved. Apparently they had had two prior sales fail when the would-be buyers couldn’t handle the wait (and the silence) from the banks.
January 19th, 2009 at 2:08 pm
Patience is a virtue when purchasing a short sale. When two banks are involved in can take many weeks for them to haggle out who is going to take what loss.
You sound like you had the right attitude and were well prepared for what lay ahead.
January 28th, 2009 at 7:33 pm
[...] the face of foreclosure is changing, what does this really mean for local buyers and sellers hoping for a short sale here [...]
February 4th, 2009 at 2:22 pm
[...] would expect to see many new construction homes taken off the market and rented, or end up at the auction blocks as builders and sellers are unable to sell [...]